What Does a Title Company Do?

Published On: March 9, 2022

Learn What a Title Company Can Do for You

When you buy a home, one of the key partners in the process is your title company. The responsibility of the title company is to verify that the seller of the house you are buying legitimately has the right to sell you their property.

Think of the title company as your own personal detective to discover any issues that may come up that could create a challenge when buying your home. The title company team will look through old records, transactions, and legal documents making sure that your home buying process will go smoothly.

What is involved in this process? Let’s take a look at the main tasks a title company will take on for you during the home buying journey including conducting a title search, issuing title insurance, overseeing escrow and closing, and distributing funds to the appropriate parties after closing.

Conduct a Title Search

The very first thing your title company will do for you is to complete a title search. Many homes have had more than one owner, and the title company will try to determine the “chain of title” to make sure there are no obstacles for you to purchase the home. A chain of title shows all the owners of a piece of property in chronological order, from the very first owner to the current owner who is selling you the property.

The title company will perform a title search of public records and look for any issues with the title. Although not common, some title issues that can arise include:

  • Liens on the property
  • Unpaid property taxes
  • Public records errors
  • Encroachment with neighbors

After the title company completes its search, it will issue a report with its findings. This is a crucial step when buying a house and most mortgage companies will not issue a mortgage without the title search report.

You have the right to order a property survey, unless you waived this right in the Agreement of Sale. The property survey will verify where your property ends and your neighbor’s property begins. Occasionally, lenders will require a property survey in addition to the title search. Your title company will either find a recent property survey that is on file or help you get one completed.

Issue Title Insurance

After the title search is completed, the title company will issue insurance. There are two different types of title insurance – one for the lender, and one for the buyer.
The lender’s title insurance is designed to protect the mortgage company if there is an issue after closing that causes the buyer to lose the house in a property dispute. The lender’s title insurance will cover the loan amount in full, and they will get their money back.

It’s important to realize that lender’s title insurance only protects the lender, and it does not protect the buyer. That is where owner’s title insurance is beneficial. Although optional, owner’s title insurance protects your investment in the property including any equity you have built up since the purchase.

For example, let’s say someone successfully claims the house was transferred to you by someone who didn’t have the authority to do so. You would have to surrender the house to the rightful owner and would have to find a new home to live in. Title insurance would give you the money you need to purchase a different home.

Oversee Escrow and Closing

Another key responsibility of a title company is to oversee escrow funds and manage the home closing process. An escrow account keeps the money needed for the transaction including funds for the sale, earnest money, down payment, and closing costs and fees.

The title company will also manage and prepare the paperwork needed for the closing, or settlement. This includes the deed, title, and legal paperwork. The title company will also arrange for a notary to be present at closing. A notary public is a person authorized to screen the signers of important documents.

Distribute Funds

The closing of your home involves the distribution of closing costs and fees. Your mortgage lender will wire the loan amount to the title company so it can be dispersed to the seller. If you are responsible for a portion of the closing costs, you will also need to send your share to the title company. After the money is distributed to all parties, the transaction is considered closed and settled.

Your Local Title Company in Central Pennsylvania

Watermark Land Transfer is a real estate title and settlement company in York, PA. Our team of title agents makes it easy for homeowners to buy or sell a home in Central Pennsylvania and Northern Maryland. We offer both on-site and virtual services and treat our clients like family. If you are in the process of buying or selling a home, reach out to us today to see how working with Watermark Land Transfer can help.

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The Benefits Of Choosing Watermark

Watermark Land Transfer is a real estate title company in York, PA offering title services, title insurance, closing and settlement services, and notary services. Our goal is simple - to provide our clients and our community with the resources they need for a hassle-free closing. We are more than a title company and work hard to show our clients that we are truly consumer-focused.

Our team of title agents makes it easy for homeowners to buy or sell a home in Central Pennsylvania and Northern Maryland. We offer both on-site and virtual title and settlement services and treat our clients like family. If you are in the process of selling or buying a home, reach out to us today to see how working with Watermark Land Transfer can help.

1st Watermark Benefits

We Are Vested in You

When you work with Watermark Land Transfer for your real estate transaction, we are truly vested in your success. We treat each contract, document, and closing as if it were our own.

2nd Watermark Benefits

We Keep You In the Loop

During the closing process, we will keep you informed every step of the way so there are no surprises on settlement day.

3rd Watermark Benefits

We Live Here, Too

Watermark Land Transfer is an independent, locally owned title company. We have the flexibility to get things done for you without the constraints of a national title company.